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AMCON leans on National Assembly to recover over N5 trillion debt
The House of Representatives Committee on Banking and Currency has promised that the 9th National Assembly would take all necessary measures that would support the Asset Management Corporation of Nigeria (AMCON) to recover the over N5.4 trillion debt owed it by obligors, before its sunset.
Speaking at a retreat Wednesday in Lagos, Committee chairman, Hon Victor Nwokolo said the National Assembly would work to ensure that AMCON not only performs its function satisfactorily, but ensures that the corporation delivers on its expected mandate, given that AMCON is a creation of the parliament.
While commending the previous assembly, the management of AMCON under the leadership of Mr Ahmed Lawan Kuru, its Managing Director/Chief Executive Officer, and the executive arm of government for amending the AMCON Act, Nwokolo said the National Assembly will indeed continue to amend the Act until the federal government achieves that target for which AMCON was created in the first place, which is to stabilise the financial sector.
He said the National Assembly will continue to strengthen the laws of the country on enforcement, adding that enforcement has become critical given the tactics of the debtors, which has made it difficult for AMCON to fully achieve its set goal.
AMCON Managing Director/CEO, who challenged the lawmakers to consolidate on the gains of the previous National Assembly said it is in the interest of the Nigerian economy to recover the debt because it was not established as a charity organisation.
Kuru, according to a statement by AMCON’s head of corporate communication, Jude Nwauzor, said AMCON raised its funds through Share Capital of N10 billion contributed equally by the Ministry of Finance (“MOF”) and Central Bank of Nigeria (CBN); 6% Bonds issued for a discounted value of N4.042tn (face value of N5.6tn) for the acquisition of Non-Performing Loans (NPLs) and the recapitalization of Eligible Financial Institutions (EFIs) and N500 billion Debenture from the CBN at 3% annual interest rate, payable 2021.
Kuru said AMCON purchased 12,743 NPLs or EBAs worth N3.8 trillion from 22 Eligible Financial Institutions (EFIs) for a purchase price of N1.8 trillion. The purchases are covered by various collaterals. AMCON also capitalizes three EFIs and provides financial accommodation to five. The corporation, he added had to inject a total sum of N2.2 trillion to ten banks – bridged and owned banks (intervened banks) – bringing Net Book Value (NAV) to Zero.
On what he is doing ahead of the sunset date of AMCON, Kuru said, AMCON “Is already working with Ernst & Young as (Financial Advisers) to see what we need to do, how we need to work with the Nigerian Insurance Deposit Corporation (NDIC) and the Central Bank of Nigeria (CBN) to thinker things a little and then at certain point in time liaising with the National Assembly draw a line.
“My suggestion will be to put all the remaining debt in one vehicle and fling the vehicle to anybody or firm that wants to buy with considerable discount. At that stage maybe it would be wise to do that and then close AMCON. There are funds all over the world that are in search of such opportunity.”
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